Tadawul Review:

Tadawul All Share Index (TASI) continues its losing streak for the fourth consecutive day declining by 14 points (-0.9%) to close at 11,345 levels. Tuesday's session was a lackluster one with the market hovering around its previous close for the majority of the session. Materials (-1.5%), Banks (-1.8%), and Retailing (-1.7%) sectors put downward pressure on the index while Energy (+0.4), Insurance (+1.6%), and Health (+1.1%) provided support. Amongst the stocks, Sipchem (-4.6%) and SABIC (-1.2%) were the major drag while Methanol Chemicals (-7.4%) was the biggest loser for the day. Trading activity remained dull with volume traded increasing by 5% to 143mn shares but value traded dropping by -2% to SAR4.3bn. The index is expected to remain choppy in the near term owing to fears of global recession, lack of positive triggers, and upcoming Eid holidays.

 

 

 

 

Market Wrap International:

The global equity indices moved in divergent directions on Tuesday as concerns about ongoing downgrades in earnings estimates for the upcoming June-end results and new cases of COVID-19 in China overcome positive sentiment over the improving ties between the U.S and China. In the U.S, the S&P 500 Index and Nasdaq Composite dropped by 1.7-1.8% initially, before a tech-fueled rebound helped rescue the indices. The Nasdaq ended up posting gains of 1.8% while the S&P 500 also pared losses to close up +0.2%. The yields on the U.S bonds rallied in the early morning before retreating as the session progressed.

In Europe, worries over potential disappointment in earnings in June-end and future downward revision dragged the stocks due to higher commodity prices and margin pressure. The benchmark Stoxx Euro 600 Index fell by 2.1% to its Feb-21 low. Banks and commodity stocks were the major drags on the index. In related news, Euro fell 1.4% against US dollar, recording a 20-year low as investors believed the risk of economic slowdown in the region has undermined the ECB’s ability to meaningfully lift the rate to rein in inflation.

 

In Asia, markets showed initial tentative signs of excitement over the potential withdrawal of tariffs by the US on Chinese products. However, the excitement proved to be short-lived as concerns on growing cases of COVID-19 diverted attention. Indices in Japan (TOPIX: +0.5%), Korea (KOSPI: +1.8%), Taiwan (TAIEX: +0.9%) recorded gains while in Hong Kong (HangSeng: +0.1%), and China (Shanghai Composite: -0.04%) were little changed.